Mammary glands become functional only in adult life but their development starts in the embryo. Initiation of the epithelial bud and ductal outgrowth are coordinated through short-range signals between epithelium and mesenchyme. Studies of natural and induced mouse mutants in which early mammary development is perturbed have identified genetic networks that regulate specific steps in these processes. Some of these signals contribute to aberrant mammary development in humans and are deregulated in cancer.